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QuadrigaCX Allegedly Traded Against Its Own Customers Without Assets To Back Them (ambcrypto.com)
geoskd writes: QuadrigaCX, the Canadian crypto exchange that made news recently with the passing of its CEO, Gerald Cotten, has been alleged to have been buying cryptocurrency from traders on its platform without having actual assets to perform the transactions. The transactions showed credit to the customers accounts, but when the customer tried to withdraw cash, they had to wait until other customers deposited cash before the funds became available. There is also an accusation that this behavior exists at many other crypto exchanges as well. Perhaps it is time to take a fresh look at Tether...
No. Just stop. Really. Just stop.
I don't respond to AC's.
It amazes me that this Ponzi scheme is still ongoing. There's ample evidence of wash trading at all the major exchanges.
One of my favorite quotes on this is from the NYU economics professor who was famous for identifying the housing bubble, who also called out the crypto currency bubble in 2017, is asked again what he thinks of the crypto movement:
Possibly this is some kind of training issue. Given there have been no issues here, I don't think it's unreasonable.
I'm beginning to think that cryptocurrency is some of the best value you can get for your money. At least in terms of entertainment for the people who didn't invest in any of it. Maybe it will all eventually settle down and turn into a respectable currency, but right now you can't find a bigger shit show anywhere and it's utterly engrossing. We should at least require that all cryptocurrency algorithms do something useful like protein folding so that at least some good comes out of all of this idiocy.
If you try to sell a gift card to Cardpool for Amazon credit when they're all out of Amazon gift cards, they will delay processing your order for an eternity (most likely, due to waiting for people to sell them some unwanted Amazon gift cards).
The internet is full of shady dealings.
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DRM is like antifreeze, to the MPAA/RIAA it's sweet, to the consumers it's poison.
The crypto pyramid scheme continues to take on more and more rats. Time to be regulated out of existence!
it lets me buy all the cookies i want
unless its monitored and regulated by authorities. Otherwise, more fraud, abuse, etc etc
The last proof of funds update there is from July 2018. Shameless plug?
Cryptocurrency prices keep staying dead means, almost nobody keep buying & selling anymore!
Meaning, cryptocurrency exchange owners, either, must declare bankruptcy (& lose everything), or, runaway w/ all customer money (sooner or later)!!!
(Of course, instead of simply running-away, some other options could be, fake your own death (in many different ways), or, get "lost" @ sea or mountains etc :-)
They sit on the money in an interest bearing bank account, and keep the interest for themselves.
I don't know why so many people find it hard to believe tether is legitimate, the business model is simple and profitable without any malicious action.
Deregulation and lack of oversight means the majority will get screwed over while a few might ... might just get rich. Everyone thinks they are one of the few, not realizing that if they haven't set the terms, written the rules, or done the time to build something, it's only a matter of time before they fall into the crosshairs of fate, criminals intent on finding out where they live, both, or far far worse.
Greed turns everyone into naive little boys and girls. The more there is to gain, the more they thinks they have a sure thing going, the greedier they get. And it is in their fall that others others become truly rich.
Thank everyone for buying into cryptocurrency! Their ruination will give rise to a better, greater world and be the better for it.
Basic math says that no crypto currency exchange that is not also profitably mining can remain solvent.
Exchanges and their egomaniac creators do not operate for free. The total hard currency that can go out to people selling crypto currency to an exchange can never be greater than the total hard currency generated by people buying currency from the exchange, because some of that incoming cash is going to be used to support operations. When the price of the crypto currency is rising, the available cash for currency sellers will always lag further and further behind. The people who make any of this possible are the "long term investors". Their cash is being used to make all the rest of this work and at some point, their cash cannot possibly be there when they want it to be unless the price of the crypto currency has fallen to well below their original purchase price and they are taking a loss.
Except banks have minimal capital requirements that prevent a depositor from having to wait for their cash. So again there is a proven mechanism in the traditional financial market that these new currencies ignore. And yes bank runs and massive economic crises can overrun this protections but it also work millions of times a day.
Isn't this just the same as fractional reserve banking?
We can't all get our deposits out of the banks at the same time.
What the hell is up with all of the unnecessary commas? They have a purpose. They aren't glitter that you sprinkle all over the fucking place.
All Fractional Reserve lending systems operate on the premise of replacing Cash with Checks, whereas each Check is both a debt that must be repaid and a piece of paper that spends the same as cash. You deposit $10k in the bank, bank hands a Check to Joe Schmoe in trade for car loan paperwork to go get a car, Schmoe buys a $10k Car, hands the check to the dealership and the Title to the bank, Dealership goes back to the bank and cashes the check. Bank writes an asset on the collaterol side of the books, and $10k as a deposit. They now have $20k in deposits and have effectively counterfeited the currency which is where your 2% annual inflation comes from. Ensuring the stability of the system in practice is an exercise in enabling the banks to sell loans to raise cash for withdrawls, and ensuring the the loans are backed with sound assets which all sounds great in theory, but in practice, is very risky which is a politicial minefield.
Once you get to the point there's a 1:1 ratio of Checks to cash, interest on the checks locks you into a game of musical chairs for repayment; someone is going to lose repaying their loan because the bank doesn't spend all that interest it gets back in. As the ratio increases (M1, M2, M3 reports), you inflate the currency base and walk up asset prices to astronomical, unaffordable levels. Eventually you get to the point the velocity of capital on the debt is insufficient to pay the interest, and at that point you either bankrupt the banker and investor community to reduce the ratio, or you continue onward and upward, which has the effect of forcibly pushing risk into everything.
Want to buy a house? What's the bet the title is bad and the title insurance company will cover it?
Want to get a job? What's the bet you're going to make enough to procreate, much less live reasonably?
Want to start a business? Want to invest in stocks? It goes on.
Eventually risk starts "boiling" everywhere as price signalling breaks down (it gets replaced with artificial or speculative demand) and the risks get realized, then a cascade failures occur which eventually coalesce into an uncontrollable market crash. The business community tries to avoid this over and over again, futilly. All of that creates political turmoil; lots of work for politicians to try to smooth over the rough edges, none of which ever works because they are not managing the underlying problem.
The latest way of making price signalling not break down is shoveling tons of checks into the crypto-currency oven. It's like a moth to flame for billionairs and is the reason we don't see all kinds of arrests. Fairly inexpensive way to keep the economy stable with the added benefit of doing some Tech R&D.
You forgot 'sheeple'.
Thank you. Best comment of the day :)
Perhaps it is time to take a fresh look at Tether...
No, perhaps it's time to take a fresh look at not using fake "currency" slung by carnival hucksters who make Donald Trump look like Mother Theresa by comparison.
Lack of regulators our other trusted authoritues requires you to be an expert in every field, studying Also, no one can afford to insure financial institutions except the government. So if you want insured financial institutions, you want government regulations.
Even if you could get private insurance for financial institution failure, now you have another organization for which you have to review auduts. Also, who audits the auditors? Government regulations exist as an attempt to solve this problem. Sure it isn't perfect, but your proposed alternative is useless withiut givernment regulations.
Public audits are great, but that doesn't make regulations bad.
Turdcoin, tool of shysters
fools, the lot of you
Shouldn't this be in Egypt instead of Canada? Isn't Egypt most commonly known for "pyramid schemes"?
If only there were some sort of open, distributed ledger that a customer could access to ascertain that the transactions were valid and backed with the declared resources.
SHHH don't say 'sheeple' you might wake them up.
> Perhaps it is time to take a fresh look at Tether...
Why? Their auditors bailed when they couldn't find assets to back the coin, which is just the more severe form of the same damn scam
Author owns tether - suspicion level 1.0
StoneCypher is Full of BS
This. And when the regulators get lazy and want to audit less banks, they just arbitrarily raise the reserve minimum to a level the banks canâ(TM)t afford to fund and poof, less banks.
Indeed.